South African insurer Old Mutual has appointed Deloitte as joint auditor alongside scandal-hit KPMG, it said on Thursday, an unusual move reflecting what it said were unresolved challenges related to its sole auditor for nearly two decades.

KPMG's South African unit is battling to restore its reputation after becoming entangled in a corruption scandal involving the Gupta family, who have been accused of using their links with former president Jacob Zuma to amass wealth.

The Guptas and Zuma have denied any wrongdoing.

Prudent to appoint joint auditor

"Old Mutual has been continuously engaging with KPMG International and KPMG South Africa on concerns regarding the ongoing challenges raised in their South Africa business," Old Mutual said. "Until these challenges are resolved, Old Mutual believes it is prudent to appoint a joint auditor."

KPMG has been losing clients over the last year after its own inquiry found flaws in work it did for the Guptas and the national tax agency.

Its woes deepened in April after failing to spot a crippling hole in smaller lender VBS Mutual Bank, a collapsed bank in which it was also revealed two of KPMG auditors had undisclosed loans.

Last month, KPMG unveiled plans to cut 400 staff and close small regional offices in response to a reduced number clients.